Best way to incorporate third party funds for an LLC cash offer

[Ryan Oldenhage]

Hello,

I'm waiting for the paperwork to come back for an LLC which will have 50/50 ownership between my partner and myself. We have funds to cover a down payment of a targeted fix and flip and a relative interested in offering the remainder of our offer in cash.

What is the best way to incorporate the third party funds into our offer? Will a bank owned, HUD or other auction site property accept proof of funds partially in the LLC name and partially from a third party not named in the LLC? Could we do a gift letter to the LLC?

I've also heard of having an investor become an equity partner of the LLC and not sure if that would apply to this situation, how that would be split since we are already at a 50/50 split (45/45/10?) and/or how that would pan out if we have other properties involved in the LLC that the equity partner is not involved in. Any thoughts or recommendations are appreciated.

[Jesse Gonzalez]

I wouldn't worry about presenting proof of funds to the seller that are not in the name of the offering entity, they shouldn't care where the funds are coming from, but if it's an issue I'd just write a letter explaining that you have outside investors and that the name on some of the proof of funds will not be in the name of the LLC, but in the name of investors. How you structure the deal internally is not something I can comment on, but that's the way I'd present to the seller.

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